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About the Negative Gearing Calculator

If your investment property is costing you more money than it is generating, it is negatively geared, and you may be able to claim tax benefits on your losses. This calculator combines the cash operating revenue, rent, and the operating expenses, with the change in the amount of income tax paid to measure the net change in an investor's income due to the investment property.

In other words, you can use your negatively geared property to reduce your income tax by a substantial amount - if you are making $100,000 in annual salary, to use round numbers, and you have a negatively geared property that is costing you $20,000 a year, your taxable income will effectively be $80,000. This means you will effectively be paying significantly less income tax, as you have been bumped down into a lower tax bracket.

If you are working in a normal job, your employer will be paying the tax on your income every pay period, but they are tax for $100,000 - not paying the effective taxable income of $80,000, which means that you are due for a refund. And that is how you can earn a tax refund through negative gearing.